Is Dave Legit? We Tested the App to Find Out

Editor’s Note: Overdraft Apps provides detailed product reviews and recommendations based upon extensive research and our own hands-on testing. We may earn a referral fee when you sign up for or purchase products mentioned in this article.

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Mitchel Harad

Mitchel Harad is an expert in consumer lending, including cash advance apps and personal loans. He has over 20 years of experience in financial services at both banks (JP Morgan Chase) and upstart lenders (Lending Club, SocietyOne). He is passionate about educating consumers on how financial systems work to empower them to make informed and cost-effective decisions. During some challenging financial times, he paid thousands of dollars in overdraft fees at a time when he could least afford them – an experience he hopes to help others avoid.

Mitchel holds a Bachelors of Business Administration in Finance from The Goizeta School of Business at Emory University and a Masters of Business Administration from The Haas School of Business at The University of California.

What is the Dave App?

Dave Inc. was founded in 2016. By 2019, they were worth a staggering $1 billion, and in 2022, they became a publicly traded company, meaning that they publish their quarterly financial statements and their securities are regulated by the SEC.

Dave’s app provides popular financial services right from your phone while avoiding some of the annoyances and high costs of traditional banks. While Dave itself is not a bank, it does offer a bank account through a partnership with Evolve Bank & Trust, which is a member of the FDIC. This means your deposits are insured for up to $250,000.

One of Dave’s most attractive features is its ExtraCash advances, which lets you borrow up to $500 with no interest or hidden fees within 5 minutes ³ for as little as a $1 monthly subscription.

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Is the Dave app legit or a scam?

Being able to borrow hundreds of dollars at no interest for just $1 per month is undoubtedly a great deal. However, you need to give the app some sensitive information before you can do so, including access to your bank account and other other personal data.

Dave requires such sensitive information in order to verify your identity and provide its cash advances, as well as other financial services. Because Dave doesn’t use credit checks to qualify you for its ExtraCash advances, they use other variables in order to determine your likelihood to pay back, such as regular deposits to your account.

a phone that showcases a user of the dave app

With all of this said, Dave has methods to protect your banking information from third parties, and to guarantee that the company itself won’t misuse it. One of these methods is the intermediation of Plaid, a system that encrypts your banking data when you connect it to external apps.

Still, many of Dave’s users have raised concerns regarding the app’s handling of sensitive user data.

Fraudulent charges?

One of the most common security related complaints about Dave are the alleged fraudulent charges that some people have received on behalf of the app.

These charges seem to be the doing of criminals who use Dave to get cash advances fraudulently via identity theft. While Dave isn’t scamming consumers, it does beg the question as to what they’re doing to prevent these types of situations.

This is probably one of the unforeseen downsides of giving people cash advances so easily. Dave hasn’t made an official statement about these complaints, but they seem to be providing customer service for users who’ve experienced fraudulent charges using the Dave app. While you may not be on the hook for repayment if your identity is used to create a fraudulent account with Dave – and Dave doesn’t use collections agencies or report missed payments to credit bureaus – it’s certainly a hassle we’d all rather avoid!

Information breaches?

There are rumors on social media about Dave having security breaches that have compromised the information of millions of its users.

In 2020 there was in fact a security breach that resulted in a hacker publishing the data of more than 7 million Dave users in a hacker forum. Dave claims the information was promptly taken down and the app took measures to tighten its security, though for users whose information was stolen, it may be too little, too late.

Service outages?

The Dave app isn’t completely immune to outages, as it recently occurred in March of this year, when the platform went online for a couple of hours to thousands of user reports.

Your money is safe from a financial standpoint, but there’s a rare chance that the app may not be working properly when you’re trying to make payments or take out an advance.

Poor customer attention?

Another common complaint by Dave users is its customer service, with an abundance of comments on social media about how difficult it is to contact and get support from the company.

Need Fast Cash?It must be said, however, that most of these complaints are at least 1 or 2 years old, and the lack of recent posts on the topic could indicate that this is an issue that Dave has already addressed.

Subscription payments after uninstalling the app?

Another very common complaint is that Dave will continue to charge you the $1 subscription after you’ve uninstalled the app from your phone.

This is arguably a sketchy way to snatch a dollar or two out of you, but it can also be attributed to some users’ inattentiveness. You need to remember to cancel your account if you no longer want to receive Dave’s services, otherwise, they’ll just keep charging you.

Hidden fees?

Dave’s fees aren’t necessarily hidden, but they aren’t crystal clear, either. On top of the $1/month subscription, you’ll also need to pay express fees, unless you can afford the luxury of waiting 2-3 business days for your ExtraCash advance.

Express fees will cost you 3% of the borrowed money if you get the money on your Dave Spending Account (with a $3 minimum and a $15 cap). With a direct deposit to your bank account, it’ll cost you 5% (with a $5 minimum and a $25 cap).

Dave also asks for tips and makes you actively select a tipping amount. A Dave tip alone can significantly increase the cost, as it is added to your repayment of your ExtraCash advance (if you give a $10 tip for a $100 advance, you’ll have to pay $110 plus express fees). Although it’s entirely optional, the app could make it easier to bypass the tipping screen. Luckily, opting out of tipping doesn’t affect your ability to borrow.

With all of this being said, Dave is still one of the cheapest ways to borrow $100 dollars among the dozens of apps that we’ve tested.

Automated repayments?

The due date for your advances is usually set to the day of your next paycheck. When the date is reached, Dave will just take the funds from your Dave Spending Account.

If there are no funds in your Dave Spending Account at the due date of the payment, Dave might proceed to charge your regular bank account directly, and even try to partially repay itself if your funds are not enough. For example, if you owe Dave $100 but only have $50 in the bank, Dave may take the $50…leaving you with nothing in the bank and still on the hook for $50 more.

The good news is that you can easily change your repayment date. Since Dave doesn’t charge interest or late fees, it won’t cost you anything extra if you need an extra week or two to pay back your advance. Be careful about taking much longer, though, as Dave may reduce your advance limit or even suspend your borrowing privileges if you take too long to repay.

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Does this Mean Dave is a scam?

Many users have reported different types of problems with the Dave app. Perhaps the most glaring issue with Dave concerning security is that, while the app itself is not a scam, it has been used to commit frauds through identity theft. In this regard, Dave can tighten up its security and provide prompt customer service to those who are affected by these frauds.

The other common complaints with Dave are related mainly to the user experience and, in truth, they are the type of issues that are common in almost all apps like Dave. Could Dave improve their user experience to make it easier and most transparent? Definitely. Could they improve their customer service? No doubt. But, to call the app a scam would be an immense stretch.

Furthermore, if the Play Store and App Store reviews are anything to go by, the issues listed above are experienced only by a minority of users. The vast majority are likely to be at least satisfied with the service, as it’s shown by the 4.8/5 average rating that the app boasts on the App Store from 675k reviews.

All in all, Dave is not only a legitimate company, but probably still one of the least costly and most secure financial apps in the market.

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Don’t Worry, Dave is Legit

Dave is a well established company whose famous cash advances have helped millions of people avoid costly overdraft fees. Their banking products are offered by a regulated partner bank that is backed by the FDIC. In other words, Dave is a legit app and not a scam.

However, the app is not perfect, as there have been reports on social media from users experiencing various issues,from connection problems to a lack of proper customer service.

The most glaring issue is perhaps the alleged fraudulent charges on Dave’s behalf that are experienced by people who don’t even use the app. Although this isn’t explicitly Dave’s fault, they do have a responsibility to provide prompt customer service to help victims of these frauds get back their money.

Besides these problems, which are for the most part common in banking and financial service apps, Dave’s services are beloved by the majority of its users, and the company is legitimate and trusted. Still, there are other apps like Dave out there, such as Chime Spotme, Albert, Cleo, Go2Bank, and Earnin. It’s worth comparing to see which cash advance app can save you the most money.

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